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Company Responses to Human Rights Reports: An Empirical Analysis

  • Menno T. KAMMINGA
Abstract

How do companies respond to their critics? Are there significant differences in responsiveness between industrial sectors, between the countries in which companies are based, and between the companies themselves? Do responses reflect the belief that companies have a responsibility to respect human rights? Do companies that participate in the UN Global Compact react more responsibly than those that do not? This article attempts to answer these questions by examining company responses to civil society reports contained in the company response database of the Business & Human Rights Resource Centre. The analysis covers responses to 1877 requests made by the Resource Centre from 2005–2014.

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Emeritus Professor of International Law at Maastricht University and former member of the Board of Trustees, Business & Human Rights Resource Centre. Comments by Christopher Avery and Mauricio Lazala and research assistance by Catalina Aristizabal, Zoja Bajzelj, Stephanie Goudriaan, and Wanghaomeng Wang are all gratefully acknowledged. I am also grateful to the anonymous reviewers and the editors-in-chief of this journal for their detailed comments and suggestions. Initial research for this project was conducted by Lynn Schweisfurth in her thesis ‘The Corporate Response to Allegations of Human Rights Abuse: An Analysis of Responses Published by the Business & Human Rights Resource Centre’ (awarded under the European Master’s Degree Program in Human Rights and Democratization).

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1 See, e.g., Jenkins, Rhys, ‘Corporate Codes of Conduct. Self-Regulation in a Global Economy’ United Nations Research Institute for Social Development, Technology, Business and Society Programme Paper, 2001; Kolk, Ans and van Tulder, Rob, ‘Setting New Global Rules? TNCs and Codes of Conduct’ (2005) 14 Transnational Corporations No. 3, 1.

2 UN Human Rights Council, ‘Corporations and Human Rights: A Survey of the Scope and Patterns of Alleged Corporate-Related Human Rights Abuse’, A/HRC/8/5/Add.2 (23 May 2008); see also Ruggie, John G, Just Business: Multinational Corporations and Human Rights (New York; London: W W Norton & Company, 2013).

3 UN Human Rights Council, ‘Business and Human Rights: Further Steps toward the Operationalization of the “Protect, Respect and Remedy” Framework’, A/HRC/14/27 (9 April 2010) para. 80.

4 A possible typology for categorizing company responses is discussed at the end of this paper.

5 Cohen, Stanley, ‘Government Response to Human Rights Reports: Claims, Denials and Counterclaims’ (1996) 18 Human Rights Quarterly 517, 521.

6 Business & Human Rights Resource Centre, ‘Introduction’ http://business-humanrights.org/pt/node/100990 (accessed 24 July 2015).

7 In some cases responses are not requested by the Resource Centre, e.g. when a report does not make serious allegations against specific companies or when responses are already in the public domain. It should also be noted that some human rights reports cover alleged abuses by more than one company. In such cases individual companies may feel under less pressure to respond.

8 Business & Human Rights Resource Centre, ‘Company Response Rates’, http://business-humanrights.org/en/company-response-rates (accessed 24 July 2015).

9 Business & Human Rights Resource Centre, ‘Lobbying “seeking to undermine” Dodd-Frank conflict minerals legislation’ http://business-humanrights.org/en/lobbying-seeking-to-undermine-dodd-frank-conflict-minerals-legislation (accessed 24 July 2015).

10 ‘Survey of Corporate-Related Human Rights Abuse’, note 2, 8.

11 Business & Human Rights Resource Centre, ‘Company Response Rates’, http://business-humanrights.org/en/company-response-rates (accessed 24 July 2015).

12 UN Human Rights Council, ‘Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework’, A/HRC/17/31 (21 March 2011), Commentary to Principle 11.

13 See Knox, John H, ‘The Ruggie Rules: Applying Human Rights Law to Corporations’ in Radu Mares (ed.), The UN Guiding Principles on Business and Human Rights (Leiden: Brill/Nijhoff Publishers, 2011) 5184, Ch. 2.

14 ‘Guiding Principles on Business and Human Rights’, note 12, Principle 18.

15 ‘Survey of Corporate-Related Human Rights Abuse’, note 2, 9. Ruggie did not gather data on other aspects covered by the present paper (home states, companies, and international instruments).

16 OECD, ‘Multinational Enterprises in Situations of Violent Conflict and Widespread Human Rights Abuses’, OECD Working Papers on International Investment, No. 2002/1, http://www.oecd.org/countries/myanmar/WP-2002_1.pdf (accessed 24 July 2015).

17 McBarnet, Doreen, ‘Corporate Social Responsibility beyond Law, through Law, for Law: The New Corporate Accountability’, in Doreen McBarnett, Aurora Voiculescu, and Tom Cambell (eds.), The New Corporate Accountability (Cambridge: Cambridge University Press, 2009) 16.

18 Cushman, John H, ‘Nike Pledges to End Child Labor and Apply US Rules Abroad’, New York Times (13 May 1998).

19 Kuszewski, Judy and Crowther, Yasmin, ‘Brent Spar: Battle that Launched Modern Activism’, Ethical Corporation (2 May 2010), http://www.ethicalcorp.com/communications-reporting/brent-spar-battle-launched-modern-activism (accessed 24 July 2015).

20 On Nike’s ‘path to corporate responsibility’, which leads from outright denial of allegations to gradually acknowledging them and integrating response mechanisms into its core business operations, see Zadek, Simon, ‘The Path to Corporate Responsibility’ (2004) 82 Harvard Business Review 125.

21 ‘Survey of Corporate-Related Human Rights Abuse’, note 2, 10.

22 This attitude by companies is reminiscent of the position taken by some states—notably the United States and Israel—that the human rights treaties to which they are parties are not applicable to their extraterritorial conduct. Fourth Periodic Report of the United States of America, ICCPR, 20 May 2012, CCPR/C/USA/4 para. 505; Fourth Periodic Report of Israel, ICCPR, 12 December 2013, CCPR/C/ISR/4 para. 48.

23 UN Human Rights Council, Draft Resolution on ‘Human Rights and Transnational Corporations and other Business Enterprises’, A/HRC/17/L.17/Rev.1 (15 June 2011).

24 UNCTAD, World Investment Report 2015 – Reforming International Investment Governance (2015), http://unctad.org/en/PublicationsLibrary/wir2015_en.pdf (accessed 24 July 2015), 6–8.

25 Berne Declaration, ‘Chevron wins the Public Eye Lifetime Award, and The Yes Men bury the “Demon of Davos”’ (23 January 2015), https://www.bernedeclaration.ch/media/press-release/chevron_wins_the_public_eye_lifetime_award_and_the_yes_men_bury_the_demon_of_davos/ (accessed 24 July 2015).

26 Berne Declaration, ‘Public Eye Awards’, https://www.bernedeclaration.ch/tagged/public_eye_awards-1// (accessed 24 July 2015).

27 In 2014, Banco Espirito Santo was salvaged from bankruptcy by Portugal’s national bank and split in two separate banks. Miles Johnson and Peter Wise, ‘Banco Espírito Santo: Family Fortunes’, Financial Times (11 September 2014).

28 Business & Human Rights Resource Centre, ‘Chinese National Petroleum Corporation (CNPC) Response to Reports on Alleged Human Rights Impacts of Shwe Gas & Myanmar-China Oil Transport Projects’, http://business-humanrights.org/sites/default/files/documents/cnpc-response-re-myanmar-pipeline-5-aug-2013-en.pdf (accessed 24 July 2015).

29 China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters, ‘Guidelines for Social Responsibility in Outbound Mining Investments’, http://www.srz.com/files/upload/Conflict_Minerals_Resource_Center/CCCMC_Guidelines_for_Social_Responsibility_in_Outbound_Mining_Operations_English_Version.pdf (accessed 24 July 2015).

30 Lague, David, Zhu, Charlie, and Kang Lim, Benjamin, ‘Special Report – Inside Xi Jinping’s Purge of China’s Oil Mandarins’, Reuters (24 July 2014), http://uk.reuters.com/article/2014/07/24/uk-china-purge-cnpc-specialreport-idUKKBN0FT2O020140724 (accessed 24 July 2015).

31 McBarnet, note 17.

32 For an analysis along these lines, see Baker, Mallen, ‘The Tricky Task of Measuring Reputation’ Ethical Corporation (27 February 2012), http://www.ethicalcorp.com/communications-reporting/tricky-task-measuring-reputation (accessed 24 July 2015).

33 UN Global Compact, https://www.unglobalcompact.org/ (accessed 24 July 2015).

34 UN Global Compact, ‘Our Participants’, https://www.unglobalcompact.org/what-is-gc/participants (accessed 24 July 2015).

35 On the vagueness of the Global Compact’s language, see Deva, Surya, ‘Global Compact: A Critique of the UN's “Public-Private” Partnership for Promoting Corporate Citizenship’ (2006–2007) 34 Syracuse Journal of International Law & Commerce 107, 129. For a recent critical analysis of the Global Compact, see Seti, S Prakash and Schepers, Donald H, ‘The United Nations Global Compact: The Promise-Performance Gap’ (2014) 122 Journal of Business Ethics 193.

36 UN Global Compact, ‘Frequently Asked Questions about UN Global Compact’, https://www.unglobalcompact.org/AboutTheGC/IntegrityMeasures/index.html (accessed 24 July 2015).

37 UN Global Compact, ‘Integrity Measures: Frequently Asked Questions’, https://www.unglobalcompact.org/AboutTheGC/IntegrityMeasures/Integrity_Measures_FAQs.html (accessed 24 July 2015).

38 Information provided to the author by the Global Compact Secretariat. Delistment for failure to submit a so-called Communication on Progress is more common. At the time of writing, 5,443 participants had been expelled for this reason. UN Global Compact, ‘Expelled Participants’, https://www.unglobalcompact.org/participation/report/cop/create-and-submit/expelled (accessed 24 July 2015).

39 The 12 non-OECD countries currently subscribing to the Guidelines are: Argentina, Brazil, Colombia, Costa Rica, Egypt, Jordan, Latvia, Lithuania, Morocco, Peru, Romania, and Tunisia. ‘OECD Declaration and Decisions on International Investment and Multinational Enterprises’, http://www.oecd.org/investment/mne/oecddeclarationanddecisions.htm (accessed 24 July 2015).

40 Schimanski, Caroline, ‘An Analysis of Policy References Made by Large EU Companies to Internationally Recognised CSR Guidelines and Principles’, study prepared for the European Commission (March 2011), http://ec.europa.eu/enterprise/policies/sustainable-business/files/csr/csr-guide-princ-2013_en.pdf (accessed 24 July 2015).

41 Cohen, note 5.

42 Business & Human Rights Resource Centre, ‘Is the UK Living up to its Business & Human Rights Commitments?’ (1 April 2015), http://business-humanrights.org/en/is-the-uk-living-up-to-its-business-human-rights-commitments (accessed 24 July 2015).

* Emeritus Professor of International Law at Maastricht University and former member of the Board of Trustees, Business & Human Rights Resource Centre. Comments by Christopher Avery and Mauricio Lazala and research assistance by Catalina Aristizabal, Zoja Bajzelj, Stephanie Goudriaan, and Wanghaomeng Wang are all gratefully acknowledged. I am also grateful to the anonymous reviewers and the editors-in-chief of this journal for their detailed comments and suggestions. Initial research for this project was conducted by Lynn Schweisfurth in her thesis ‘The Corporate Response to Allegations of Human Rights Abuse: An Analysis of Responses Published by the Business & Human Rights Resource Centre’ (awarded under the European Master’s Degree Program in Human Rights and Democratization).

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